TAIWAN Law and Practice Contributed by: Ken-Ying Tseng, Vivian Cheng, Julia Kuei-Fang Yung and Gail Chang, Lee and Li Attorneys-at-Law
2.2 Primary Regulators The Ministry of Economic Affairs (MOEA) is the prima - ry authority responsible for the approval of corporate registration in Taiwan. If an acquisition involves foreign or PRC investments, the Department of Investment Review (DIR, formerly the Investment Commission) of the MOEA is the authority in charge of reviewing such investments. For transactions involving public compa - nies, the Securities and Futures Bureau (SFB) of the Financial Supervisory Commission (FSC) is the main regulator. Additionally, if the target company holds any special licence and/or operates in a regulated indus - try, the authority in charge of that specific sector may also be required to review the transaction. Finally, if the transaction meets the relevant thresholds for anti- trust clearance, it will be subject to the review of the Fair Trade Commission (FTC). 2.3 Restrictions on Foreign Investments Taiwan generally adopts a dual-track regulatory frame - work for inbound investments, distinguishing between general foreign investors and Mainland Chinese (PRC) investors. The regulatory requirements and investment thresholds for each category are as follows. Foreign Investment (Non-PRC) Direct investment and the negative list Under the Statute for Investment by Foreign Nationals (SIFN), foreign investors may be subject to prohibi - tions or restrictions on owning certain classes of Tai - wanese businesses. Pursuant to the Negative List for Investment by Overseas Chinese and Foreign Nation - als promulgated by the Executive Yuan, last amended on 8 February 2018 (the “Negative List”), industries in which foreign ownership may be prohibited or restrict - ed include certain sectors in agriculture, husbandry, fishing, forestry, manufacture of chemical materials, telecommunications, television and radio program - ming or broadcasting, transportation, and legal and accounting services, among others. All foreign inves - tors (other than foreign investors making portfolio investments in Taiwan under the Regulations Gov - erning Investment in Securities by Overseas Chinese and Foreign Nationals (the “FINI Regulations”), as dis - cussed below) wishing to make direct investments in the shares of Taiwanese companies are required to obtain foreign investment approval from the DIR or other government authorities.
Tender Offer Tender offers are available and commonly conducted for acquiring listed shares. In accordance with the Securities and Exchange Act and Regulations Gov - erning Public Tender Offers for Securities of Public Companies (the “TO Regulations”), a mandatory ten - der offer bid is required for an acquisition of 20% or more of the issued shares of a public company within 50 days. Merger A merger (with the consideration of cash, shares or their combination) is available for acquisition. In a statutory merger, special approval of the board of directors and shareholders at the meeting of each of the participating parties is required. Business Transfer This type of transaction refers to a transaction in which a company assumes all or a material part of the business, assets and liabilities of another company. A special approval of the shareholders of the parties participating in the transaction is required. Share Swap A company may be acquired by another company or a newly incorporated company by a share swap, whereby the acquiring company issues new shares, cash or other assets, or a combination of shares, cash and/or other assets to the shareholders of the target company in exchange for their shares in the target company, which will result in the acquiring company holding 100% of the issued shares of the target com - pany, and the shareholders will either be flipped to hold shares of the acquiring company or cashed out, depending on the form of consideration paid. Demerger In a demerger (or spin-off), a company transfers one of its independently operated businesses or all of its business to an existing or newly incorporated com - pany in exchange for shares, cash or other assets issued by the acquiring company. Similar to a merger, special approval from the board of directors and the shareholders’ meeting is required.
1281 CHAMBERS.COM
Powered by FlippingBook